Federal Direct Subsidized and Unsubsidized Loans





Note: An education loan is a legally binding contract that must be repaid even if you do not graduate or are unable to find a job. If necessary, borrow only what is needed.

Federal Direct loans are a federally funded educational loan program. Students awarded a subsidized Direct Loan OR unsubsidized loans as part of a financial aid award and accept that award will have a loan processed by the College.

Information regarding the completion of a Master Promissory Note (MPN) will be included with the award letter. The Federal government will pay for the accruing interest while the student is enrolled on at least a half-time basis.

Federal Subsidized and Unsubsidized eligibility

  1. U.S. citizens or permanent legal residents.
  2. Enrolled in school at least half-time.
  3. Male students must satisfy requirements under the Selective Service Act.
  4. If student is in default on a prior loan or owe a refund on grant money, he or she will NOT be able to borrow further.
  5. Loan awards cannot exceed the cost of education as determined by the school.

How to apply for Federal Direct Subsidized or Unsubsidized Loans?+

  • Apply for FAFSA (Free Application for Federal Student Aid) https://fafsa.ed.gov/
  • Florida SouthWestern State College school code is: 001477
  • Be enrolled in at least 6 credit hours
  • Accept or decline loans offered to you based on your eligibility through FSW Portal
  • Complete Entrance Counseling at www.studentloans.gov
  • Complete a Master Promissory Note (MPN) at www.studentloans.gov

What is the hours limit rule on subsidized loan?+

If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time you can receive Direct Subsidized Loans only. The U.S. Department of Education pays the interest for a subsidized loan while you are in school attending class at least half time or part-time. You cannot exceed 150% of the published length of the program you are enrolled in. All attempted credit hours are considered toward the maximum time calculation, regardless of whether or not financial aid is received. Once you have reached the maximum timeframe, you are considered ineligible for financial aid.

For more information, click here.

When can I start repaying my loan?+

You do not have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. Your lender must provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment. Keep in mind that your loan may have a grace period. Click here for more information: https://studentaid.ed.gov/repay-loans/understand/plans

What is a grace period?+

The grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. The grace period gives you time to get financially settled and to select your repayment plan. The Subsidized Loans grace period is 6 months before payments are due.

How much can I borrow?+

Loan limits

The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. The following table shows the maximum amount of money you may borrow each academic year in Direct Subsidized and Unsubsidized Loans as well as the total or aggregate amount you may borrow:

Direct Stafford Loan Limits (Subsidized and Unsubsidized)
Undergraduate students
Dependent1 Independent2
1st-year $5,500 ($3,500)3 $9,500 ($3,500)
2nd-year $6,500 ($4,500) $10,500 ($4,500)
3rd- and 4th-year $7,500 ($5,500) $12,500 ($5,500)
Aggregate4 $31,000 ($23,000) $57,500 ($23,000)
1Except those whose parents are unable to borrow a PLUS loan.
2These limits also apply to dependent students whose parents are unable to borrow a PLUS loan.
3The numbers in parentheses represent the maximum amount that may be subsidized.
4Maximum total debt from Stafford Loans when you graduate (aggregate loan limits).

What are the interest amounts?+

Loan Type Borrower Type Loans first disbursed on or after 7/1/17 and before 7/1/18
Direct Subsidized Loans Undergraduate 4.45%
Direct Unsubsidized Loans Undergraduate 4.45%
Direct PLUS Loans Parents 7.00%
All interest rates shown in the chart above are fixed rates for the life of the loan.
Note: The interest rates for federal student loans are determined by federal law. If there are future changes to federal law that affect federal student loan interest rates, we will update this page to reflect those changes.

What is Exit Counseling?+

Student borrowers who have graduated, withdrawn or dropped to less than 6 credits for a semester are required to complete a loan exit interview within 30 days after they leave the college or drop to less than half time enrollment.

Visit NSLDS.ED.GOV and log in with your FSA ID to guide you through the required process.